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Neglecting Daily Management

The end is near! Well, at least the end of the Top Ten Stupid Six Sigma Tricks (SSST) countdown. The Heretic soldiers on until his appointment with the stake. This month, we arrive at Stupid Six Sigma Trick #2: Neglecting Daily Management. In this SSST, companies get so starry-eyed over the fancy statistics that can solve big problems that they forget to do the day-to-day basics, and find out to their detriment what Carroll’s Red Queen meant.

If you recall my first Heretic article, I ranted about how we define Six Sigma, and I mentioned that, to many, Six Sigma was all you needed to run a business, and that I had seen how thinking like that would get you into trouble. In SSST #4, I tried to buttress this reasoning talking about how DMAIC is not a panacea—its usefulness is in forging a new path—and that other proven methods exist for accomplishing some of the many tasks a business must do to remain a business. In those cases, DMAIC provides only trivial guidance on how to proceed, and you are better off seeing if someone else has blazed the trail.

This is nowhere more evident than in daily management.

Daily management is the “System that provides the ability to manage departments, functions, and processes, wherein processes are defined, standardized, controlled, and improved by the process owners.” (“Daily Management and Six Sigma: Maximizing Your Return”Annual Quality Congress Proceedings, American Society for Quality, May 20, 2002) In my experience, many companies “doing” Six Sigma place a much smaller emphasis on these activities than they do the big, sexy Black Belt projects. This is exactly opposite what you should be doing.

Kozo Koura recognizes that 80 percent of what management does should be strategic projects like this, but that 80 percent of the time spent across the company as a whole should be focused on daily management.

I’d like you to take a moment and think about that definition and notice how it’s different from a DMAIC project:

DMAIC

Daily Management

Duration

Specified end-point

Never-ending

People involved

A few highly trained Black Belt and process owners of targeted areas

Everyone else

Output

One-time large improvement for each project

Ongoing small improvements

Impact

Uses local and nonlocal resources to deal with a few, big problems

Uses local resources everywhere to work on many continuous improvement projects, empowers process owners

Here’s the thing: your business has problems. Well it does, doesn’t it? Some of these problems require a big change, maybe a huge change in how you think about something or your knowledge of the process. If you can fix these problems, they’re worth a lot of money and might even save your business, and so there is reason to devote a lot of time and resources to really dig into these problems. But if you have enough of these problems to keep most people at your business working on them, the good news is you won’t have to worry about them for long. Of course the bad news is that you will be out of business.

Numerically though, there are a lot more small problems that everyone faces every day. Individually they’re annoying inefficiencies, but collectively they add up to the death by a thousand cuts. Daily management is the system whereby your business attempts to control and eliminate the thousands of little everyday problems.

In SSST #9—Confusing breakthrough with continuous improvement, I told you about the vice president of quality who said, “I can see how Black Belts are like a rifle you take with you to the woods—they’re great for shooting big problems like bears. The problem is I am up to my waist in snakes!” This is the place that had “done” Six Sigma before we came in, but still had severe operational problems. All their Black Belts were working on big, important problems that had to be fixed, though. After implementing a daily management system on one particular process with just the local resources, they improved their productivity metric by 80 percent in a couple of weeks. All that was involved in getting that improvement was putting together a consensus standard operating procedure—not rocket science for sure, but also not anyone’s job to do when elements of daily management were missing. Besides, because you can tap so many more people to do this type of improvement, you can get a big benefit over many processes.

If you don’t have a system for daily management in addition to your Six Sigma “Belt” cadre, you are wasting the brains and experience of 95–98 percent of the people you employ. As Konosuke Matsushita said in 1988, “Business, we know, is now so complex and difficult, the survival of firms so hazardous in an environment increasingly unpredictable, competitive, and fraught with danger, that their continued existence depends on the day-to-day mobilization of every ounce of intelligence.”

I have to tell you, I’ve talked with people who worked in companies that became so focused on Six Sigma projects that they forgot to maintain their systems for daily management. If you can believe it, there are even some companies that just tell their managers and employees to “do what they need to do” and have no systematic daily management. I know! Totally wack! (To use the current vernacular.)

Well, why doesn’t that work? Can’t we just tell people to improve their process continuously and have them go at it? Don’t we have great people who are smart and can just go do it?

Maybe we could, in some alternate reality where pigs fly and snowballs don’t melt. I have seen that the vast majority of people want to do a good job, but that they need to know what a good job is. They need a form around which to structure their efforts to organize what needs to be done. Otherwise it’s overwhelming and things get missed. One plant manager described it to me like this: “Each of my department heads knows their job, and it’s like they are all mowing the lawn in parallel rows—concentrating on mowing their row really well. But there’s an unmown stripe in between each of stuff that isn’t getting done, and no one sees it as their job to do it!” (If you’re thinking that I have had an atypical number of metaphoric clients, you might be right.) Part of what daily management does is assign those gaps to someone, again using local resources to identify those gaps.

As it is, at many companies the continuous improvement activities rest on the abilities of exceptional individuals reinventing ways to figure out what to work on and how to get it done, with all the variation in results that implies. Think about it, if nothing else, the one thing we want to provide is a system for how we manage every day, and yet very few companies that I have seen do a very good job of providing all the elements of daily management. Everyone does some daily management, but very few do it well.

Now here is the way I tell people to think about daily management. There are many other models, but I think ours is pretty good and it has been pretty successful too, so you might find it helpful. We imagine that the elements of daily management form a house that we call the “House of Daily Management.” OK, so not an alliterative and catchy name such as Six Sigma maybe, but we’re pretty no-nonsense about this stuff.

Figure 1: The House of Daily Management Model

The elements of a good daily management system are:

Daily work: This is the day-to-day activity, or primary purpose of the area. The other rooms support the “roof” of the house.

Establish ownership: This involves the establishment of the roles and responsibilities for the area. The “foundation” of the house upon which all the other “rooms” rest.

Define and standardize: The area’s processes are defined and the development and implementation of common operational practices are performed.

Daily control: This involves the monitoring, control, and reaction activities of important processes to maintain performance levels and prevent backsliding.

Daily work improvement: This is the system that takes system input, prioritizes opportunities, and deploys and monitors local resources. Some of these improvement actions may be Black Belt projects.

Data-based communication: This is the ongoing communication of information to provide system feedback, focus, and alignment within and between areas.

Process quality management: These are the rooms or systems of daily management that bring about definition, control and continuous improvement of the area. These “rooms” manage the process quality – the “big Q” – which ultimately results in the product or service quality – “little q.”

Take a moment and see how well you think your business does in these areas. If you’re like most businesses, you will do some well and others...not so much.

For me, the really sad thing is when a company is all gung-ho to achieve Six Sigma and throws all their energy and resources into Black Belt projects and the like that involve maybe 5 percent of your company. Then, if you have done a really good job of internally marketing Six Sigma, the rest of the people are thinking, “Well, what can I do to help?” If at this point they get the message that “Six Sigma is all about complex experimental designs that hoi polloi couldn’t possibly understand, just go do your work like a good little employee,” you have just performed a self-inflicted business lobotomy. And the really sad bit is you probably have trained that person quite well in what Six Sigma means to them, and they will be hostile to that idea from then on.

If Six Sigma is to be a chosen few—the best, brightest and most politically connected fair-haired boys—is it any wonder that the rest of us are going to perceive something exclusionary about that? In that case quality has nothing to do with me—if there’s a quality problem let THOSE guys handle it, and by the way they can figure out how to run the machine on their own, since I for sure am not going to help them. How could I think otherwise, since I have been robbed of pride in and ownership of my work?

On the other hand, if our business depends on Six Sigma Black Belt projects as well as the work I do in my area for daily management, we’re all in this together. I make improvements in my area, and if I need help there, I can call for a Black Belt to help me out. Take a look at the following diagram, which shows how two of the rooms in the house of daily management interface with cross-functional management (managing across areas) and policy deployment (aligning areas with the strategic plan). As opposed to the top “pushing” Black Belts into an area to fix something that the process owners (rightly or wrongly) might not even think is necessary, it actually becomes a “pull” system for Black Belt projects where the process owners know that they have a problem and need more resources than they have to fix it.

In turn, when Black Belts complete a project, they have an existing system of process monitoring to hand it off to, so the problem doesn’t recur when the Black Belt moves onto the next project.

Effect of SSST #2

How does daily management conflict with Six Sigma? It doesn’t. It meshes neatly with it. If you look at who does the work, you see that there’s little overlap, and if you look how the two interface, they become interlocking parts of the whole. People assume that with Six Sigma, they will see step-change improvements in their business:

But in reality, in the absence of a good daily management system, you get an ongoing degradation through time:

Therefore, all those benefits from the breakthroughs you Black Belts have achieved erode away due to increasing inefficiencies in all the other processes in your business. Then you are living what Lewis Carroll’s Red Queen said: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

With both breakthroughs and continuous improvement, however, you end up farther ahead than using either type of improvement alone:

This is what gives you a competitive advantage. Even if you aren’t devoting special resources to a particular process, the process owners are working on it and continuously improving through time. This prevents small problems from getting bigger, and identifies big problems before they become catastrophic. It imbues everyone with a sense of ownership in their process, and allows people to take pride in their work. It provides a mechanism to bring in outside eyes, like a Black Belt, to help with your process.

Daily management and Six Sigma together make your company more money than either one alone through periodic infusions of Black Belt projects, and the miracle of compound interest with continuous improvements.